In this year’s General Election, voters will be asked to decide on a proposed constitutional amendment (Con Am) that would give the Legislature the authority to create one of the largest tax increases in Hawai‘i’s history. The ballot question reads:
“Shall the legislature be authorized to establish, as provided by law, a surcharge on investment real property to be used to support public education?”
The question is vague, but the consequences are clear — this new tax will raise the cost of living for EVERYONE in our state.
There is a misconception that this new tax will only affect rich, out-of-state and foreign investors who own homes worth $1 million or more, but that’s not true.
There is NOTHING that indicates that the Legislature’s intent is to only tax homes worth $1 million or more. The fact is, the Legislature deliberately removed specific language from the ballot question that would have limited the tax to properties valued at $1 million or greater.
As it stands, the proposed amendment would allow the Legislature to establish a new tax on all “investment real property” — residential, commercial and agricultural — regardless of their value. This would include a second home that has been in a family for generations, walk-up apartment buildings, neighborhood shopping centers, farmlands and more. The impact will be felt not just by property owners, but by the people and businesses who rent from them.
Families who rent will pay more for housing when their landlord’s property taxes increase.
Businesses that lease their space (restaurants, grocery stores, dentists, veterinarians, senior care homes, clothing stores, auto repair shops, farms, etc.) will see their rents go up because property owners will pass the added tax burden on to them. Those businesses, in turn, will pass the increased rent expense on to customers in the form of higher prices for goods and services.
In addition, there is no guarantee of more money for public schools or that the money raised from this new tax will be used to give teachers raises or help our keiki. The Legislature could use the new funds to replace a portion of the $2 billion in General Funds that currently goes to education and divert it to other priorities. Voting “yes” means you are giving state legislators a blank check.
This new tax also will hurt the counties. The state Constitution gives the counties exclusive authority to tax real property. It is the primary source of revenue to pay for core services like police, fire, street repairs, garbage pickup and park maintenance. Giving the state authority to tax real property would undermine and interfere with this authority, make it even more difficult for county officials to balance their budgets and hurt the counties’ bond ratings, which means borrowing costs will go up.
Local families are being priced out of paradise. Hawai‘i already has the second highest tax burden in the country and one of the highest costs of living. We cannot afford another tax — VOTE “NO” on the constitutional amendment.